During an analyst call, the bank’s CEO and Managing Director, Sumant Kathpalia, said, “I believe general reserves cannot be used, so we will have to show it in the P&L.
The review follows RBI’s rules from September 2023 about how lenders should manage their investment portfolios, especially focusing on the Other Asset and Other Liability accounts.
The IndusInd Bank statement said, “The bank has also hired a well-known external agency to clearly review and verify the internal findings.”
Nuvama Institutional Equities represents that the loss will be adjusted through the income statement, mostly via NII, in Q4FY25E.
The brokerage is worried about the timeline because the CFO resigned just before the Q3 earnings, and the CEO only got a one-year contract extension instead of three, and now there’s an issue with derivatives.
They believe it will affect IndusInd Bank’s credibility and earnings, and because of this, the brokerage downgraded the stock to ‘reduce’ and lowered its target price to ₹750 per share.
According to Money Control – During an analyst call on March 10, Kathpalia said that the Reserve Bank of India is “not satisfied with my leadership skills” in running IndusInd Bank.
His comment came after the RBI approved Kathpalia’s reappointment as MD & CEO of IndusInd Bank for one year, instead of the three years the bank had requested.
